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Admin Law Answers-60

Article 300 outlines the government's ability to engage in legal contracts, requiring that they be made by the President or Governor and executed according to their authorization. Contracts not adhering to Article 299(1) are void and unenforceable, with personal immunity for the President and Governor in such cases. Additionally, Section 70 of the Indian Contract Act allows for compensation to prevent unjust enrichment, while Article 14 mandates that government actions in contracting must be rational and free from arbitrariness.

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2 views1 page

Admin Law Answers-60

Article 300 outlines the government's ability to engage in legal contracts, requiring that they be made by the President or Governor and executed according to their authorization. Contracts not adhering to Article 299(1) are void and unenforceable, with personal immunity for the President and Governor in such cases. Additionally, Section 70 of the Indian Contract Act allows for compensation to prevent unjust enrichment, while Article 14 mandates that government actions in contracting must be rational and free from arbitrariness.

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• Article 300: Defines the extent to which the Government may sue or be sued in

relation to its affairs.

2. Mandatory Requirements under Article 299(1) For a contract to be legally binding on


the Government, it must fulfill three fundamental conditions:

• Expression: The contract must be expressed to be made by the President of India or


the Governor of the State, as the case may be.
• Execution: It must be executed on behalf of the President or the Governor.
• Authorisation: It must be executed by such persons and in such a manner as the
President or the Governor may direct or authorise.

3. Nature and Effect of Article 299

• Mandatory Nature: The Supreme Court has consistently held that the provisions of
Article 299(1) are mandatory and not merely directory.
• Consequence of Non-compliance: A contract that does not strictly comply with
these formalities is void and unenforceable against the Government. No rights can
accrue to a private individual from such a void contract.
• Personal Immunity (Article 299(2)): Neither the President nor the Governor is
personally liable for contracts made for the purposes of the Constitution. This
immunity extends to the authorised officers executing the contract, provided they act
within their authority.

4. Equitable Remedies: Section 70 of the Indian Contract Act To prevent "unjust


enrichment" by the State, the courts apply Section 70 of the Indian Contract Act.

• Principle: If the Government enjoys the benefit of work done or goods delivered by a
person who did not intend to act gratuitously, the State is bound to make
compensation, even if the contract is void under Article 299.
• Conditions: (i) The act must be lawful; (ii) it must not be gratuitous; and (iii) the
other party must have enjoyed the benefit.

5. Judicial Review and Article 14 While the Government has the freedom to contract, it
cannot act like a private individual.

• Anti-Arbitrariness: Every action of the State in the contractual field must be


informed with reason and free from arbitrariness.
• Threshold Stage: At the entry point (awarding contracts), the State must follow
rational, relevant, and non-discriminatory standards.
• Post-Contract Stage: The State cannot cast off its personality as a "State" after
signing the contract; Article 14 continues to apply to ensure fairness and prevent
"mala fide" termination.

III. LIABILITY OF THE ADMINISTRATION IN TORT

1. Constitutional Basis (Article 300) Article 300(1) states that the Government of India or a
State may sue or be sued in relation to its affairs in cases where the Dominion of India or the

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